South America has been a special part of my life for four decades. I have lived many years in Brasil and Peru. I am married to an incredible lady from Argentina. I want to share South America with you.

Brazil’s trade surplus hits December record

Brazil has reported its largest December trade surplus on record as economic turmoil curbs demand for imports.

The trade ministry said on Monday that Brazil rebounded from a deficit of $4bn in 2014 to a trade surplus of $19.7bn last year. In December, the surplus reached $6.2bn — the largest for that month since the data series began in 1980.

It was the biggest annual surplus since 2011. While economists welcomed the return to positive territory, they warned that it was further proof of Brazil’s economic woes: the yearly result was driven by a 24 per cent decline in imports. Machinery and auto parts shipments fell particularly steeply, according to the ministry’s figures.

IN AMERICAS ECONOMY

FirstFT is our new essential daily email briefing of the best stories from across the web

“The improvement continues to be led by a sharper decline of imports than exports,” said Mario Mesquita, an analyst at Brasil Plural bank. Exchange rate depreciation and contraction of domestic demand should continue to dictate the trade balance this year, he said, forecasting a surplus of $40.7bn in 2016. Demand for foreign goods has plummeted over the past year as the country slips into what is expected to be its worst recession since the great depression of the 1930s.

Economists polled by the central bank released bleak forecasts Monday, predicting that the economy would have contracted by 3.71 per cent in 2015 and would shrink a further 2.95 per cent this year.

The depreciation of Brazil’s currency, the real, against the dollar has further curbed demand for imports. The real led losses among emerging market currencies once again on Monday, weakening beyond the R$4 mark against the dollar.

However, its depreciation has also prevented a collapse in exports. The value of exports fell only 14 per cent, to $191bn, last year compared with 2014, even as slumping Chinese demand knocked down iron ore and soya bean prices.

“Exports grew 10 per cent in quantity in 2015, but a 22 per cent reduction in international prices mitigated the gains obtained by the higher quantity of exports,” said Daniel Godinho, the secretary of foreign trade. He highlighted higher vehicle exports, particularly to Mexico, Argentina and Uruguay.

Copyright The Financial Times Limited 2016. You may share using our article tools.

Jack's South America

I started my South American adventure in 1973 in Chile. I had the misfortune to arrive a couple of days before General Pinochet staged his military coup and took power from Salvador Allende. I found myself staying at the Sheraton Hotel in Santiago. As the coup unfolded all sorts of men in US Army officer's uniforms appeared. Even more sinister were men with elegant designer slacks, silk shirts, and Rolex President watches. I knew from my days in Vietnam that they were part of the CIA Phoenix Program team. These people had been responsible for political kidnappings and assassinations in Vietnam. I was asked what I was doing there and my military record checked with the Pentagon. I did not end up in the infamous soccer stadium where many people were executed including two Americans.

I went on to spend 2 years in Peru and Five years in Brasil where I lived through the awful days of the military dictatorships.

It all was not sadness and war. I met many wonderful people who had to survive under difficult circumstances. I came to love and admire them. South America always has a special place in my heart. My first wife was from Brasil and my dear wife Elena is from Buenos Aires.

About Me

When I was a very young man I had an incredible grandmother named Sarah Elizabeth Walters. She told me the following words: "Son don't let the grass grow under your feet." I took those words to heart and went out to see the world. My life has been ana adventure all over the world. I have lived on six of the seven continents. I have been lucky to live this long.